Seoul Administrative Court 201Guhap32706 (2012.05.04)

National Tax Service Review Income 2011-0044 (201.30)

The plaintiff seems to have received forest land directly as a brokerage commission in the position of the business operator, so the disposition of additional tax is legitimate.

The Plaintiff appears to have received forest land directly from the purchaser as a brokerage commission, and should be deemed to have received forest land as a brokerage commission by supplying real estate brokerage services as a business operator. Therefore, the disposition of value-added tax is legitimate.

2012Nu15472 global income and revocation of disposition, etc.

Park XX

Samsung Head of Samsung Tax Office

Seoul Administrative Court Decision 2011Guhap32706 decided May 4, 2012

November 16, 2012

January 18, 2013

1. Revocation of a judgment of the first instance;

2. The plaintiff's claim is dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

The Defendant revoked the imposition of global income tax of 200 won in 2003 and value-added tax of 000 won in 2003 against the Plaintiff on January 3, 201 (the Plaintiff’s claim for the imposition of global income tax of 000 won in the complaint on January 3, 201 and the imposition of additional tax of 00 won in excess of 00 won in the imposition of global income tax of 2003 and the imposition of additional tax of 00 won in the imposition of global income tax of 2003, respectively, shall be revoked; however, Article 47(2) of the Framework Act on National Taxes provides that “The imposition of additional tax of 00 won in the imposition of value-added tax of 00 won in 203 and exceeding 00 won in the imposition of additional tax of 00 won in each of the imposition of additional tax shall be adjusted, taking into account the above imposition of each of the above amounts as a national tax).”

2. Purport of appeal

The same shall apply to the order.

1. Details of the disposition;

A. On May 17, 2005, the Plaintiff received a summary order of KRW 000 from the Suwon District Court (Seoul High Court Decision 2005Da13217) for the following criminal facts. The above summary order is finalized on May 31, 2005, and the Plaintiff paid the above fine on June 14, 2005.

B. On May 7, 2007, the Defendant, on the ground that the Plaintiff omitted sales of KRW 000,000 for the second term of 2003, and on September 4, 2007, determined and notified each of the global income tax of KRW 000 for the global income tax for the year 2003 on the ground that the Plaintiff reported the omission of the revenue of the said real estate brokerage commission (hereinafter “the first disposition”).

C. On October 2010, the Defendant issued an additional decision and notification on the Plaintiff on January 3, 201, on the ground that: (a) based on the information on tax evasion, on the ground that the Plaintiff was found to have nominal title trust and failed to file a tax return with respect to the instant forest that received from XX as a broker fee; (b) the global income tax amount of KRW 000 for 2003 and value-added tax for 200 for 203 years (hereinafter “instant disposition”).

D. The Plaintiff dissatisfied with the instant disposition and filed a request for examination on April 12, 201, but the Commissioner of the National Tax Service dismissed the said request for examination on June 30, 2011.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 4, Gap evidence No. 5-1, 2, Gap evidence No. 6, Eul evidence Nos. 1 through 6, 10, 11, and the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) The instant forest land, which was the leading role in the transaction of the instant real estate, is charged with commission for its repair. However, the Plaintiff asked that the Plaintiff would not be aware of the fact that the instant forest land was received from the Plaintiff, and that the Plaintiff would not be aware of the fact that the instant forest was received from the Plaintiff. As such, the Plaintiff’s statement to the investigative agency as if the instant forest was received from the Plaintiff upon request, is merely a statement of the Plaintiff at the intermediary fee. Accordingly, the instant forest should be excluded from the Plaintiff’s income of brokerage commission.

2) The Plaintiff is merely a single-time brokerage of the instant real estate, and thus, is not an entrepreneur operating a real estate brokerage business under the Value-Added Tax Act, and the instant disposition based on the premise that the Plaintiff is a real estate broker

3) Even if the forest land of this case is the Plaintiff’s brokerage commission, the imposition period of the value-added tax for the second period of 2003 and the global income tax for 2003 was expired on January 25, 2009 and May 31, 2010, which was five years from the day following the day following the respective filing deadline.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) Whether the forest land of this case is a brokerage commission

Unless there are special circumstances where it is difficult to adopt a judgment of facts in a criminal trial in light of the civil or administrative trial as well as other evidence submitted in the civil or administrative trial, even though it is not bound by the fact-finding in a criminal trial, the facts that have been recognized as the crime of criminal judgment which has already become final and conclusive in relation to the same facts are significant evidence, and thus, the facts opposed thereto cannot be recognized unless it is deemed difficult to adopt a judgment of facts in a criminal trial in light of the civil or administrative trial (see, e.g., Supreme Court Decisions 81Nu324, Sept. 13, 1983; 2007Da69148, Feb. 14

In light of the above legal principles, in light of the following circumstances, it is reasonable to deem that the Plaintiff received the forest of this case from the purchaser as a brokerage commission, and the remaining evidence submitted by the Plaintiff alone is insufficient to reverse the recognition, and there is no other evidence to reverse the recognition. Accordingly, this part of the Plaintiff’s assertion on a different premise is without merit.

A) As seen earlier, the Plaintiff was convicted of violating the Real Estate Brokerage Act by obtaining the instant woodland from XX as a brokerage commission without registering the establishment of a real estate brokerage office. In particular, the Plaintiff was punished by a fine of KRW 000 due to the above criminal facts, etc., but did not have any objection thereto at all, and even after the judgment became final and conclusive, paid the said separate money in full.

B) The Plaintiff asserted to the effect that the Plaintiff made a statement at the investigative agency as if he received the instant forest as brokerage commission upon the Plaintiff’s request. However, the Plaintiff’s head cannot accept the Plaintiff’s above head in light of the following: (a) although the Plaintiff received 000 won in cash from the seller, it is not persuasive that the Plaintiff did not receive any brokerage commission from XX; and (b) even though the Plaintiff did not receive any benefit from Article XX or from the leastAA, it is difficult for the Plaintiff to receive the Plaintiff’s request while taking charge of the above criminal punishment even though he did not receive any benefit from the Plaintiff; and (c) the Plaintiff’s request from the

C) The seller, as the buyer, stated in the investigation agency that this case’s forest land would be transferred to the Plaintiff in the name of ParkCC as the Plaintiff demanded by the Plaintiff. The seller stated that this case’s forest land would be transferred to the Plaintiff in the name of ParkCC because this case’s forest land would be transferred to the Plaintiff by the buyer.

D) ParkCC, a spouse of the Plaintiff, appears to have lent its title to the Plaintiff with respect to the instant forest upon the Plaintiff’s request, and seems to have no relationship with the XX or the leastA.

2) Whether a business entity is a business entity

According to the relevant provisions of the Enforcement Decree of the Value-Added Tax Act and the Value-Added Tax Act, the subject of the imposition of value-added tax is a transaction for the supply of goods or services, the supply of goods refers to the delivery or transfer of goods based on all contractual or legal grounds, and the taxpayer is a person who independently supplies goods or services for business regardless of the existence of profit-making profit, that is, a business operator, and thus, a business operator transfers or transfers goods based on contractual or legal grounds, the subject of the imposition of value-added tax is all subject to the imposition of value-added tax, unless there is a special provision that the exemption or imposition of value-added tax shall not be levied if the business operator independently supplies goods, etc. for business purposes. As such, the requirements for taxation are satisfied if the business operator independently and repeatedly supplies the goods, etc. (see Supreme Court Decision

In light of the above legal principles, it is reasonable to deem that the Plaintiff supplied real estate brokerage services in the position of the business operator and received the forest land of this case as brokerage commission in light of the following circumstances, i.e., ① the Plaintiff appears to be a business operator operating real estate sales business (sale of a housing site) from January 20, 199 to the date of sale, ② the Plaintiff’s omission of sale of KRW 000,000,000, which was paid by the Plaintiff from this BB, as the seller, was made ex officio registration as the taxable business operator on September 1, 2003 and imposed value-added tax as the initial disposition, but the Plaintiff could not raise an objection or go through the appeal procedure. Accordingly, it is reasonable to deem that the Plaintiff supplied real estate brokerage services to the position of the business operator and received the forest of this case as brokerage commission. Accordingly, the Plaintiff’s assertion on this part is without merit.

3) Whether the exclusion period has expired

"Fraud and other unlawful acts" under Article 26-2 (1) 1 of the Framework Act on National Taxes refer to acts which enable the evasion of taxes and which are generally recognized as illegal under social norms, i.e., deceptive or other active acts which make it impossible or considerably difficult to impose and collect taxes. It does not constitute a mere failure to file a tax return or making a false tax return without accompanying any other acts. However, in addition to the circumstances where active concealment is revealed, such as the failure to file a tax base or underreporting of taxable objects and the fraudulent bookkeeping, check, etc., and the repeated use of several borrowed accounts, it may be recognized that the imposition and collection of taxes is impossible or considerably difficult. Moreover, it may be deemed that the active concealment of sales appears in the final tax return of value-added tax, without issuing a tax invoice with the intent to evade value-added tax, by intentionally omitting the sales from the return, or by establishing a disguised enterprise by lending the name of another person (see, e.g., Supreme Court Decision 201Do3145, Mar. 24, 2011).

In light of the above legal principles, it is reasonable to view that the Plaintiff’s series of actions related to the forest of this case constituted “Fraud or other unlawful acts” as stipulated in Article 26-2(1)1 of the Framework Act on National Taxes. Thus, the exclusion period for imposition of value-added tax and income tax on the Plaintiff’s evasion pursuant to Article 26-2(1)1 of the Framework Act on National Taxes shall be ten years from the date on which the pertinent value-added tax and income tax may be imposed pursuant to Article 26-2(1)1 of the Framework Act on National Taxes, and the disposition of this case imposed on January 3, 201, which is apparent in fact within the said period, is lawful as it complies with the exclusion period for imposition. Accordingly, the Plaintiff’s assertion on this part is without merit.

A) The Plaintiff did not file a tax return on the forest land of this case under XX as a brokerage commission, but rather filed a registration of ownership transfer as if ParkCC directly purchased the forest land of this case from thisB by requesting it with ParkCC meeting the requirements for permission for a land transaction contract. In this process, the Plaintiff in collusion with ParkCC to obtain permission for a land transaction contract by submitting a written forest management plan that prepared a false purchase purpose as if ParkCC purchases the forest land of this case for forestry management. As seen earlier, the Plaintiff not only violated the Real Estate Brokerage Act, but also obtained a final and conclusive judgment of conviction due to the violation of the Act on the Registration of Real Estate under Actual Titleholder’s Name, and the National Land Planning and Utilization Act.

B) For the purpose of resale of the instant forest, the Plaintiff: (a) requested the LA to sell the instant forest; and (b) delivered to the LA documents necessary for the registration of transfer of ownership, such as a certified copy of the resident registration in the name of the ParkCC, which was dried from the ParkCC; (c) on February 5, 2004, the Plaintiff received documents necessary for the registration of transfer of ownership from the LAA to the LA; and (d) on February 4, 2004, it appears that the Plaintiff completed the registration of transfer of ownership with respect to the instant forest under the name of the maximum FF, which

C) As such, it is reasonable to view that the Plaintiff, with the permission for a land transaction contract obtained by fraudulent and illegal means, completed the registration of ownership transfer in the name of ParkCC with respect to the instant forest, and had the leastA conduct the registration of ownership transfer with respect to the instant forest for the purpose of resale for not less than three months, and had the Plaintiff leave the Plaintiff’s name as to the instant forest that was received as brokerage commission, thereby making it impossible or considerably difficult to impose and collect taxes impossible or considerably difficult.

3. Conclusion

If so, the plaintiff's claim of this case is dismissed due to the lack of reason, and the judgment of the court of first instance is unfair. The defendant's appeal is accepted, and the judgment of the court of first instance is revoked, and the plaintiff'